Which of the Following Statements Regarding Economic Regulation Is TRUE

question 143

Multiple Choice

Which of the following statements regarding economic regulation is TRUE?

• A) Economic regulation has failed by insisting that firms must be allowed to earn a normal rate of return.
• B) Rate-of-return regulation has been much more effective than cost-of-service regulation.
• C) Economic regulation deals only with rates of return, and not with prices.
• D) Economic regulation deals mainly with prices firms charge, but firms can alter their return by altering quality of service, effectively raising the price per constant-quality-unit.

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Definitions:

Multiple Industries

Refers to the diverse sectors of the economy, including manufacturing, services, agriculture, and technology, among others.

Unions

Organizations formed by employees to negotiate collectively with employers over wages, benefits, working conditions, and the rights of workers.

Worker Control

The concept or practice where workers have decision-making power in the management and operations of the workplace.

Collective Bargaining

The practice of negotiating labor contracts that cover a range of workplace conditions and compensations between unions and employers on behalf of the employees.